LONDON: KEFI, the gold and copper exploration company, has provided an update on its joint venture, Gold and Minerals SLA (GMCO), in Saudi Arabia with majority partner Abdulrahman Saad AlRashid & Sons (ARTAR).
The partners are conducting a strategic review, resulting in KEFI deciding to reduce its stake in GMCO from 25% to 15% instead of contributing $10 million. This process is now being formalized.
KEFI is also considering selling its remaining 15% shareholding, with potential proceeds to be received. This decision is based on several factors, including:
- GMCO’s plans to start initial development and increase regional exploration soon.
- ARTAR has been funding GMCO’s exploration activities for the past year, covering KEFI’s $10 million share.
- Raising funds through KEFI equity is seen as dilutive to KEFI shareholders.
- The historical cost of investment was used to determine the dilution.
Any future sale of KEFI’s remaining shareholding will be based on market valuations, which KEFI believes could be at a significant premium following consultations with market analysts.
KEFI is focusing on its majority-owned projects, including the Tulu Kapi Gold Project in Ethiopia, which is being prepared for finance closing, construction, and production. GMCO has spent around $80 million on discoveries and feasibility studies, reporting about 3 million ounces of gold-equivalent resources.
GMCO’s growth plans include building its leadership team, developing the Hawiah and Jibal Qutman discoveries in two stages, and expanding regional exploration. The partners will evaluate strategies to optimize GMCO’s growth and value over the next six months.